2014 (11) TMI 540 - HC - Central Excise

Denial of refund claim - Transfer of incidence of duty on consumers - Captive consumption - Whether in the facts and circumstances of the case, the Tribunal was right in holding that the incidence of duty on intermediate products captively consumed is to be treated as having been passed on to the customer of the final product, even though there was no change in the price of the final product before during and after the relevant period - Held that - Assessee had produced some materials before the Commissioner of Central Excise (Appeals) seeking refund. Those documents are not before us. In any event, the question whether the incidence of duty has been passed on to the buyer is the issue which has to be decided in the light of the documents submitted and in the light of the decisions already cited supra. We, therefore, are inclined to remand the matter back to the Original Authority to re-consider the issue in the light of the documents said to be filed by the appellant before the Commissioner of Central Excise (Appeals) and in accordance with the law as decided - Matter remanded back - Decided in favour of assessee.

Summary

Issues:
1. Whether the duty on intermediate products captively consumed should be treated as passed on to the customer of the final product?
2. Whether the case law on the incidence of duty on final products applies when the issue is the duty on intermediate products captively consumed?

Analysis:
1. The appellant sought a refund of duty paid on intermediate products used in the manufacture of paper ring tubes and defense containers. The Original Authority initially granted the refund but later denied it based on the doctrine of unjust enrichment, stating that the duty had been passed on to customers. The Commissioner of Central Excise (Appeals) reversed this decision, noting that the price of the final product remained constant, indicating no passing on of duty. The Tribunal, however, relied on precedents to rule in favor of the Revenue, leading to the present appeal.

2. The Tribunal's decision was based on the premise that uniformity in price does not negate the passing on of duty. The appellant argued that as the consumer of the intermediate products, passing on duty to a third party was irrelevant. The Revenue contended that without evidence, the refund could not be granted. The High Court remanded the matter to the Original Authority for reconsideration in light of the documents submitted before the Commissioner of Central Excise (Appeals) and relevant legal principles.

3. The High Court emphasized the need to determine whether the duty incidence was passed on to the buyer based on the evidence presented. The remand was aimed at ensuring a thorough review of the case in line with applicable laws and precedents. The judgment highlights the importance of substantiating claims with evidence and the significance of considering all relevant factors in determining the passing on of duty in such cases.